The Court of Appeal sitting in Abuja has overturned a previous ruling by the Federal High Court in Port Harcourt, granting First Bank of Nigeria (FBN) a significant legal victory in its ongoing $225.8 million debt dispute with General Hydrocarbons Limited (GHL) over crude oil cargo aboard the FPSO Tamaru Tokoni.
In a decision delivered by Justice Polycarp Kwahar, the appellate court allowed First Bank’s appeal and authorized the sale of the crude oil cargo in question. The court ordered that proceeds from the sale be paid into a high-yield escrow account to be managed by the Chief Registrar of the Court of Appeal. The funds are to be held pending final determination of the case either at the trial court or arbitration.
Justice Kwahar further directed that the Chief Registrar take immediate custody and possession of the crude oil to prevent unauthorized sale or dissipation by any party during the pendency of legal proceedings.
This latest judgment comes after Justice Emmanuel Obile of the Federal High Court, Port Harcourt, had earlier dismissed First Bank’s suit, ruling that the dispute was not a maritime claim but rather a debt recovery issue. The lower court’s decision was based on a preliminary objection raised by GHL.
First Bank of Nigeria has alleged that General Hydrocarbons Limited owes $225.8 million, tied to a crude oil transaction for which the FPSO Tamaru Tokoni cargo was allegedly used as security. The bank claimed GHL had fraudulently diverted proceeds from the sale of the oil cargo.
However, GHL has consistently denied owing the debt, and in turn accused First Bank of abusing an ex parte freezing order by allegedly releasing part of the crude to Conoil and the Nigerian National Petroleum Corporation (NNPC) without due process.
